Danish architecture firm Schmidt Hammer Lassen has teamed up with American artist James Turrell to design a domed extension to one of Denmark's most-visited museums (+ slideshow).

Schmidt Hammer Lassen was invited to create a new subterranean gallery space for the ARoS Aarhus Art Museum, having previously designed the building the museum has occupied since 2004.

Named The Next Level, the €30 million (£21 million) expansion is intended to "bring the museum into the world elite of modern art museums".

Two domed halls within the 1,200-square-metre extension will host a pair of immersive light installations by James Turrell, called The Sphere and The Dome.

Morten Schmidt describes working with the installation artist as "a privilege".

"Our studio is not just designing a new room for a new art work, we are co-creating the space and the installation simultaneously with James Turrell," he said.

An oculus in the ceiling of one of the low mounds will allow a stream of light into the underground space.

"Visitors will be able to look up to the sky through a circular open hole in the ceiling," said a spokesperson for the firm. "As an artistic indicator of the space, James Turrell wishes to create a ray of light to get the sensation of the complementary colours."

The new exhibition halls will link with the underground levels of the existing museum building, which features an atrium with a coil-shaped staircase and curving balconies.

This portion of the building is crowned by a loop-shaped viewing gallery by Danish-Icelandic artist Olafur Eliasson. Sections of the glassed area are illuminated by bright colours after nightfall.

"The Next Level project will develop the museum horizontally in contrast to the existing vertical movement, and it is exciting to work with the great lines spanning from the river to the square of the Aarhus Music Hall," said Schmidt.

The ARoS Aarhus Art Museum extension is expected to complete in 2018. The Danish city is also home to a metal-clad library, also by Schmidt Hammer Lassen, while Henning Larsen's turf-covered Moesgaard Museum is located nearby.

Significant redevelopment is also taking place around Aarhus' harbour, where a cluster of iceberg-shaped blocks were completed in 2013. Bjarke Ingels' firm BIG has also drawn up proposals for harbourside swimming baths and beach huts.

Photographs of James Turrell with a model of the extension are by Morten Fauerby-Montgomery.